Community Health Systems, Inc. CYH is well poised to grow on the back of business expansion and cost-reduction initiatives. Its business diversification efforts bode well.Community Health — with a market cap of $1.6 billion — is growing on the back of the rising demand for healthcare services. Based in Franklin, TN, Community Health is a leading operator of general acute care hospitals and outpatient facilities in communities across the United States.Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.VGM ScoreCYH currently has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 offer the best investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.Rising EstimatesThe Zacks Consensus Estimate for Community Health’s 2021 earnings is pegged at $1.67 per share, indicating a massive rise from 45 cents a year ago. The company beat earnings estimates in each of the last four quarters, with an average surprise of 675%.Community Health Systems, Inc. Price and EPS Surprise Community Health Systems, Inc. price-eps-surprise | Community Health Systems, Inc. QuoteThe consensus estimate for 2021 revenues stands at $12.3 billion, suggesting a 4.1% year-over-year rise.Growth DriversCommunity Health’s restructuring initiatives lowered costs to a great extent. In 2018, 2019, and 2020, operating costs and expenses declined 12%, 19.1%, and 15.1% year over year, respectively. Operating costs as a percentage of net revenues declined to 90.4% as of Dec 31, 2020 from 95.1% at 2019-end. Although the same increased 2.2% for the first nine months of 2021, we expect the metric to decline going forward. The company is constantly monitoring operational activities to cut costs. Going forward, its expenses are expected to improve further on the back of a planned business rejig.The hospital industry suffered in 2020 due to the postponement of elective surgeries amid the pandemic. It regained momentum in 2021 on the back of recovering volumes. Community Health is expected to keep growing on the back of this momentum, with an increase in the demand for healthcare services.CYH made investments in telehealth, which gained substantial response amid the COVID-19 environment. On an annualized basis, it managed to deliver around 650,000 telehealth visits. The demand for telemedicine is expected to continue, given its efficiency and popularity. This, in turn, will diversify Community Health’s revenue sources and increase profits.The company has been gaining from a series of acquisitions and partnerships over the past several years. CYH’s subsidiary, Northwest Healthcare, signed a joint venture with Select Medical Holdings Corporation SEM to acquire Curahealth Tucson last June. Moves like these will keep expanding Community Health’s business.The company is focused on increasing facilities. In the 2018-2020 period, it added 250 beds along with 50 new surgical and procedural suites. It also unveiled three new ambulatory surgery centers and freestanding emergency departments each. The company opened two new hospitals in Indiana and Arizona. It recently invested in bed and service line expansions in Birmingham, Naples, Huntsville and Knoxville, etc. CYH has a pipeline of activities lined up for the near future. The Tucson East De Novo Hospital is likely to commence operations in first-quarter 2022. Further, it has de novo and expansion projects for inpatient facility development as well as service line expansion projects for cardiac, neuroscience, and post-acute & specialty in the growth pipeline. We expect the company to gain momentum from all these strategic initiatives.Key ConcernsThere are a few factors that are impeding the growth of the stock lately.Balance sheet weakness can affect Community Health's financial flexibility. At third quarter-end, CYH had only $1.3 billion in cash and cash equivalents, while long-term debt was recorded at $11.9 billion. Also, a weak cash flow situation is concerning. For the nine months ended Sep 30, 2021, net cash provided by operating activities of $400 million plunged from the year-ago comparable figure of $2.1 billion. Nevertheless, we believe that a systematic and strategic plan of action will drive long-term growth.Better-Ranked PlayersSome better-ranked players in the Medical space include PaciraBioSciences, Inc. PCRX and Molina Healthcare, Inc. MOH. While PaciraBioSciences sports a Zacks Rank #1, Molina Healthcare has a Zacks Rank #2.PaciraBioSciences — based in Parsippany, NJ — is a specialty pharmaceutical company focused on the development, commercialization, and manufacture of proprietary pharmaceutical products, primarily for use in hospitals and ambulatory surgery centers. PCRX’s bottom line for 2021 is expected to jump 30.3% year over year. PaciraBioSciences beat earnings estimates thrice in the last four quarters and missed once, delivering an earnings surprise of 1.6%.Headquartered in Long Beach, CA, Molina Healthcare is a multi-state managed care organization, participating exclusively in government-sponsored healthcare programs. MOH’s bottom line for 2021 is expected to jump 25.3% year over year. In the last four quarters, Molina Healthcare beat earnings estimates twice and missed on the other two occasions, with the average surprise being 4%. 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